Process Innovation:

Impacts on Organization's Performance

A Qualitative Study of Four Swedish Municipalities

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Authors:

Gedoc Sintset Kenfac

Sahand Nekoumanesh

Mingyan Yang

Tutor: Ph. D. Soniya Billore

Examiner: Ph. D Rana Mostaghel

Level and Semester:

Bachelor Thesis

Spring 2013

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Abstract

Nowadays, industrialization has had strong negative effects on our surrounding environment.

Therefore, all the societies around the world are trying to achieve sustainable development

and cleaner surrounding. "Living well, within the limits of our planet" is the new action

program for the European Union (EU). One area which has been raising great concern as a

consequence of urbanization is the waste management, how waste can be recycled and be

useful again. In 2001, a law was passed in Sweden for banning the landfill of combustible

waste. Because of this, the municipalities applied innovation in their organization and

processes to improve their waste management processes. Understanding how this new

processes were developed and implemented by the municipalities, can lead to the

understanding of the success factors of the process and how it impacts on the municipalities

waste management departments and eventually the whole organizations.

This study has investigated how different municipalities in Sweden applied process

innovation in the waste management department. The purpose of this qualitative study of four

municipalities in Sweden was to investigate the impacts of process innovation in waste

collection processes on municipalities' performances in Sweden by the use of grounded

theories method.

During this study, it was discovered that, the application of process innovation have a positive

impact on the municipalities financial and customers performances. Also, the importance of

process innovation as a step by step process and not a big bang change was discovered to be

crucial for a successful process innovation.Applying corporate social responsibility as a self-

regulation mechanism inside an organization, which contribute to environmetal sustainibility

for organization; also showed positive relation with municipalities’ performances.

Keywords: Innovation, process innovation, organization’s performance, CSR

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Acknowledgment

Writing this Bachelor thesis was one of the most inspiring things we have ever done. It

required a lot of work, but the feeling at the completion remunerated for all the endeavors.

Writing this thesis was a rich learning process for us, but this will not have been possible

without the help of several people who we wish to thank.

We wish to thank our tutor Ph. D. Soniya Billore and our examiner Ph. D. Rana Mostaghel for

their tremendous contribution and support throughout the whole bachelor thesis writing

period. Special thanks also goes to the different representatives of Kalmar, Lund, Karlskrona

and Växjö municipalities, who granted us the interviews. We are also grateful to all our

opponents groups, who gave us valuable thoughts and comments during the period of writing

this thesis. Last but not the least; we would like to thank our families and friends who

supported us both morally and financially throughout this project.

Sintset G, Nekoumanesh S and Yang M.

Linnaeus University

Spring 2013

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Table of Contents 1. Introduction ................................................................................................................................................. 1

1.1 Background ....................................................................................................................................... 1

1.2 Problem Discussion .......................................................................................................................... 3

1.3 Purpose .............................................................................................................................................. 5

1.4 Delimitations ..................................................................................................................................... 5

1.5 Outline of the Thesis ......................................................................................................................... 5

2. Literature Review ........................................................................................................................................ 7

2.1. Process Innovation ........................................................................................................................... 7

2.1.1 Process Innovation and Success Factors ........................................................................ 9

2.1.2 Process Innovation and Organization’s Performance ................................................... 10

2.2 Corporate Social Responsibility (CSR) .......................................................................................... 11

2.3 Organization’s Performance ............................................................................................................ 13

3. Research Model and Research Questions .................................................................................................. 14

3.1 Proposed Research Model ............................................................................................................... 14

3.2 Research Questions ......................................................................................................................... 15

4 Methodology .............................................................................................................................................. 15

4.1 Research Approach ......................................................................................................................... 16

4.1.1 Inductive vs. Deductive Research ................................................................................ 16

4.1.2 Qualitative vs. Quantitative Research .......................................................................... 16

4.2 Research Design .............................................................................................................................. 17

4.3 Data Sources ................................................................................................................................... 17

4.4 Research Strategy ............................................................................................................................ 18

4.5 Data Collection Method .................................................................................................................. 20

4.6 Data collection Instrument .............................................................................................................. 22

4.6.1 Operationationalization and Measurement of Variables .............................................. 22

4.6.2 Interview Guide ............................................................................................................ 23

4.6.3 Pretesting ...................................................................................................................... 24

4.7 Data Analysis Method ..................................................................................................................... 24

4.8 Sampling ......................................................................................................................................... 25

4.8.1 Sampling Frame ........................................................................................................... 25

4.9 Quality Criteria ............................................................................................................................... 26

4.9.1 Content Validity ........................................................................................................... 26

4.9.2 Construct Validity ........................................................................................................ 26

4.9.3 External Validity .......................................................................................................... 26

4.9.4 Reliability ..................................................................................................................... 27

4.10 Chapter Summary ......................................................................................................................... 27

5. Empirical Investigation ............................................................................................................................. 28

5.1 Secondary Data ............................................................................................................................... 28

5.1.1 Swedish Municipalities ................................................................................................ 28

5.1.2 Waste Management in Sweden .................................................................................... 29

5.2 Primary Data ................................................................................................................................... 30

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5.2.1 Case Kalmar ................................................................................................................. 30

5.2.2 Case Karlskrona ........................................................................................................... 32

5.2.3 Case Lund ..................................................................................................................... 36

5.2.4 Case Växjö ................................................................................................................... 37

5.3Chapter Summary ............................................................................................................................ 39

6. Analysis ..................................................................................................................................................... 41

6.1 Process Innovation .......................................................................................................................... 41

6.2 Process Innovation Impacts on Organization’s Performance .......................................................... 43

6.3 Corporate Social Responsibility (CSR) .......................................................................................... 44

7. Conclusion ................................................................................................................................................. 46

7.1 Discussion of the Results ................................................................................................................ 46

7.2. Theoretical and Managerial Implications ....................................................................................... 48

7.3. Limitations ..................................................................................................................................... 48

7.4. Suggestions for Future Research .................................................................................................... 50

8. Bibliography .............................................................................................................................................. 50

9. Appendix ................................................................................................................................................... 55

9.1 Appendix 1: Interview Guide .......................................................................................................... 55

List of Tables

Table 1. Collected Volumes of Bulky Waste (Tones) ............................................................................. 2

Table 2. Flow of ThisStudy ..................................................................................................................... 6

Table 3. Relevant Situation for Different Research Strategies .............................................................. 19

Table 4. Operationalization ................................................................................................................... 22

Table 5. Research Methodology in this Study ....................................................................................... 27

Table 6. Summary of Emprical data ...................................................................................................... 39

List of Figures

Figure 1. CSR Impact Model ................................................................................................................ 13

Figure 2. Research Model ..................................................................................................................... 15

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1. Introduction

This chapter of the study discusses the effects of industrialization and urbanization on our

surrounding environment and explains that these effects may result in unstable economic

system and increase in waste. Afterward, significance of waste management as a process

which needs to be developed is stated. Based on a literature review, process innovation,

Corporate Social Responsibility (CSR) and their impacts on organization’s performance are

included in the discussion in order to identify the research gap. The chapter concludes with

delimitations and the outline of the thesis.

1.1 Background

Most of the scientists today agree with the notion that humans are spoiling Earth’s ecosystems

(Cohen & Winn, 2007). Although, there has been extensive economic growth and increase in the

quality of life over the last century, concern remains that the era of industrialization has had

substantial negative effects on the natural environment and these effects have led to reduce the

dynamism and sustainability of our economic systems (Dean & McMullen, 2007). Therefore,

making changes is required to reduce the waste of resources and emission of pollutants.

Effective control of the generation, storage, recycling and reuse of waste is of dominant

importance for proper health, environmental protection, natural resources management and

sustainable development (Sales et al, 2006). Under these intense circumstances, waste

management has become a very crucial notion in most societies. Waste management includes

collection, transport, recovery and disposal of waste as well as supervision of mentioned

operations and after-care of disposal sites (Pongrácz & Pohjola, 2004).

In Europe, the European Union’s (EU) “Sixth Environment Action Program” identifies waste

prevention and management as one of a top priority in order to achieve sustainable development

(European Commission, 2010). Sweden as one of the European developed countries was an

early starter in terms of sustainable thinking (Swedish Institute, 2010). In the 1960s, the country

came to the understanding that rapid use of natural resources had to be confronted, and took a

lead in organizing the first United Nation conference on the environment theme which was held

in Stockholm in 1972 (Ibid). Since then, it has continued to work actively with environmental

issues, both nationally and internationally (Swedish Institute, 2010). According to the latest

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statistics from Avfall Sverige (Swedish Waste Management and Recycling association), waste

volumes in Sweden are increasing slightly as can be seen in Table 1.In 2011, quantities of

household waste were almost 4.35 million tones which shows higher amount of produced waste

compare to earlier years. The new figures illustrate the importance of never being satisfied with

existing collection, recycling and treatment methods (Avfall Sverige, 2012).

Table 1. Collected Volumes of Bulky Waste (Tones)

(Adapted from Avfall Sverige 2012)

2007

2008

2009

2010

2011

Bulky

Waste

1,227,400 1,421,100 1,498,400 1,518,000 1,636,000

In Sweden, the traditional classification of waste is divided into three main categories which

are: domestic refuse (household waste), industrial waste and hazardous waste (Hartlen, 1996).

Waste management processes in Sweden, are carried out to achieving the maximum

environmental and social benefits (Avfall Sverige, 2012). All the people are expected to

contribute in this endeavor including producers, businesses, municipalities and households

(Ibid). Municipalities take care of household waste; producers for their respective product

groups and enterprises for handling all non-household waste (Ibid). Since January 1991,

Swedish municipalities are responsible for waste management planning, waste collection and

final disposal of collected household waste (Ibid). In 2002, the Swedish government passed a

law on banning the land filling of combustible waste (Milios, 2013). Therefore, Swedish

municipalities started categorizing waste and producing useful materials and energy such as

biogas, electricity and fertilizers from different categories of waste in order to decrease the

land filling. It should be noted that, an organization “is and organized group of people with a

particular purpose, such as a business or government department” (Oxford Dictionaries, 2013)

and the municipalities being a government department can be considered as an organization.

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1.2 Problem Discussion

Given the increasing waste production numbers and the country’s strong background in

environmental activities, it is not surprising that all municipalities put their efforts on

developing and improving waste management processes in dealing with household waste in

Sweden. The processes and technical issues concerning the waste treatment and disposal have

to be reinforced by innovation (Misra & Pandey, 2005). Technology input requirements have

to be worked out to achieve sustainable development (Ibid). Being innovative and achieving

the sustainability goals with the desire to make profits and maintain economic efficiency is

not a simple matter (Zahra et al., 2009). With increasing the needs for developing more

efficient processes in order to handle the household waste in Sweden, municipalities,

regardless of sizes, sectors and geographical locations, have developed a series of activities

which help them deal with the challenge of innovation (Bessant et al., 2005).

Innovation has been argued to be the engine of growth and it can provide the growth

regardless of the condition of the larger economy (Trott, 2005). It has been highlighted the

significance of innovation and new ideas as stimuli to economic growth and stated that

competition caused by new products is enormously more important than changing the price of

already existing products (Ibid). Innovation has been considered as a wide concept and can be

defined in different ways and contexts. One of the more comprehensive definitions is offered

by Myers and Marquis (1969): Innovation is considered as a total process which consists of

interrelated sub-processes. It is not only the notion of a new idea or invention of a new device.

It is actually integration of these actors in a specific manner.

In relation to applying the innovation concept on the field of sustainability, it is arguable that

sustainability innovations are innovations which increase the overall performance of a

company with regards to the economic, environmental and social issues (Hansen et al., 2009).

Recently, interests have been raised in understanding the business case of environmental

sustainability among academia, industry and public institutions (Pujari, 2006). Waste

management processes like any other processes, need to be improved by process innovations

and developments. Development of waste management processes as a business goal could

gain superior productivity and sustainability for the municipalities. Process innovation is

considered as an important source of increased efficiency and can enable organizations to gain

competitive advantage (Reichstein & Salter, 2006). Process innovation can be defined as

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newly introduced elements into an organization`s production or service operations with the

aim of achieving lower costs and higher product or service quality (Ibid). Many empirical

studies showed that innovation capability is the most important factor of organization’s

performance and diffusion of innovations literature suggests that organizations must be

innovative to gain a competitive edge in order to survive (Calantonea et al., 2002).

On the other hand in the field of waste management, corporate social responsibility (CSR) has

a strategic importance to many companies (Luo & Bhattacharya, 2006). It is also claim that

CSR can lead to innovation by using the environmental, social and sustainability drivers to

provide new products, services, processes, market space and new ways of working (Little,

2006).

CSR refers to organizations’ willingness to contribute to a better society and cleaner

environment (European Commission, 2001). Concerning the relation between innovation and

CSR, it can be said that some consumers want the goods they purchase to have certain

socially responsible attributes (product innovation), while some also value knowing that the

goods or services they purchase are produced in a socially responsible manner (process

innovation) (McWilliams & Siegel, 2001). Application of CSR will provide several

advantages for the organization and can be seen in monetary and nonmonetary terms (Weber,

2008).

Impacts of innovation on organization’s performance have been a matter of significant

interest to economists and policy makers for a long time (Hashi & Stojčić´, 2012). Prior

studies on innovation normally reported a positive relationship between innovation and

organization’s performance (Gunday et al., 2011). Even though innovation is generally

concerned as a means of improving the organization's competitiveness and performance, this

relationship has not been supported explicitly by empirical work (Hashi & Stojčić´, 2012).

Additionally, few studies discuss the consequences of innovation application within the

organizations and those that do are limited in scope (Camisón & Villar-López, 2012). On the

other hand, innovation processes toward sustainable development have received increasing

attention during the past years (Rennings, 2000). Therefore the objective of this paper is to

explore the effects of process innovation as a way to achieve sustainable development, on the

municipalities’ performances.

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1.3 Purpose

The purpose of this study is to investigate the impacts of process innovation in waste

collection processes on municipalities’ performances in Sweden.

1.4 Delimitations

The focus of this study was on application of innovation process in the household waste

collection processes by Swedish municipalities. It investigated the impacts of this application

on municipalities’ waste management departments’ performances. Kalmar, Karlskrona, Lund

and Växjö which are located in southern Sweden had been chosen as study cases in this

qualitative study. This study explored the impacts of process innovation application on

financial, market and customers’ performance of these waste management departments of

municipalities and eventually performances of the whole municipalities. Therefore,

drawbacks and technical aspects of waste collection process were not considered as intention

of the paper. This study also investigated the advantages and positive effects of innovation in

waste collection processes in both business to consumers (B2C) and business to business

(B2B) contexts. Although, innovation may result in some unconstructive effects as well. This

attempt was done in order to get a deeper understanding regarding how these municipalities

can entice more strategic partners to work with as well as fulfilling individual customers’

needs. Due to limited time and resources these municipalities were chosen because of their

proximity to the researchers. This closeness could provide the opportunity to have an in-depth

exploration concerning the chosen topic for the research.

1.5 Outline of the Thesis

This study is divided into seven parts and is structured as follows (Table 2.).

Chapter 1 presents the significance to develop waste management processes. It also

introduced the relevant concepts, namely process innovation, Corporate Social Responsibility

(CSR) and their impacts on organization’s performance. Moreover, it stated the purpose and

delimitations of this study.

Chapter 2 presents the literature review regarding to three main theories of this study: process

innovation, CSR and organization performance.

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Chapter 3 presents the proposed research model and research questions.

Chapter 4 presents the chosen research methodology with its justification.

Chapter 5 presents both primary and secondary data which gathered from articles, websites

and interviews in accordance to the research models.

Chapter 6 presents the analysis in relation to the collected data.

Chapter 7 presents the conclusion of this study regarding the research questions. In addition,

based on the findings of this study, theoretical and managerial implication, limitations are

suggested for future study.

Table 2. Flow of ThisStudy

Introduction

Literature Review

Research Question

Methodology

Empirical Data

Analysis

Conclusion and Implications

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2. Literature Review

This chapter reviews some existing literatures on process innovation, CSR and organization’s

performance and goes through prior researches concerning these concepts. It also brings the

relevance of these concepts to chosen topic of the study.

2.1. Process Innovation

Innovation has been investigated in many disciplines and is defined from diverse perspectives

(Damanpour & Schneider, 2006). In a broad way, innovation can be defined as the adoption

or creation of new ideas (Ibid). At the organizational level, process of innovation is strongly

associated with organizational learning and refers to ability of organization to generate, accept

and implement new ideas, processes, products or services (Calantonea et al., 2002). However,

the nature of innovation in services is different from in manufacturing. Innovations in

services are rarely radical and are mostly small improvements of products and processes.

(Fuglsang, 2008). It has been demonstrated that innovations in services are more complex and

integrated. They are often product, process and organizational (Ibid). Davenport (1993, p 1)

introduced a new approach towards process innovation as one of the main types of innovation.

This approach “combines the adoption of a process view of the business with the application

of innovation to key processes”. This new approach can help organizations achieve major

reductions in process cost, improvements in quality, service levels and other business

objectives (Ibid). It is defined process innovation in service industry as the adoption of

technologically new or significantly improved production methods (OECD, 2005). These

methods may concern changes in equipment, production organization or a combination of

these changes and may be derived from the use of new knowledge. Process innovation leaves

product functionality unchanged, while lowering the cost of production by a constant

percentage (Adner & Levinthal, 2001). Successful process innovations lead to reductions in

both the cost and price of the product, eventually leading to pressure on profit levels and, in

turn, increasing the attractiveness of product innovation (Ibid). Process innovation clearly

induces extra productivity growth at any point of the process (Huergo & Jaumandreu, 2004)

and will result in increasing the organization’s price-cost margin by lower production cost

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(Fritsch & Meschede, 2001). The process of innovation in organizations has been divided into

a variety of phases (Damanpour & Schneider, 2006). According to Fuglsang (2008), the

process innovation can be divided into three steps which are:

The Idea Phase

The Development Phase

The Implementation Phase

The Idea Phase- Innovation as Strategic Innovation

Ideas do not come from nothing, but from inspiration, sources of information or other people.

Therefore managers, employees and customers are the most important idea makers (Fuglsang,

2008). Ideas often come from interaction where several of these actors are involved (Ibid). It

is extremely important for maintaining employees and customers’ involvement in idea phase.

This phase of innovation includes such activities to recognizing a need, searching for

solutions, studying existing innovations and identifying appropriate innovations for the

organization (Damanpour & Schneider, 2006).

The Development Phase- Project Organization

This phase consists of evaluating the proposed ideas from technical, financial and strategic

aspects, making the decision to accept an idea as the desired solution, and allocating resources

for its acquisition, modification and assimilation (Meyer & Goes, 1988).

After acceptance of an idea in the service organization, a development process starts in order

to develop the idea and make it usable (Fuglsang, 2008). This phase is typically done by

establishing a project group that has the task of developing the idea (Ibid). The development

phase is mostly an introverted working phase where the project group obtains knowledge,

solves problems and assesses market opportunities (Ibid). It is essential that the project group

members are motivated to learn from development process and organization has a procedure

to storing the experiences. Since innovation process in service cannot be put on a standardized

form, the project groups cannot just follow a prescription. However, they can benefit from

experiences had by other project groups (Fuglsang, 2008). They should have access to earlier

experiences, both in the form of implicit and more explicitly formulated knowledge (Nonaka

& Takeuchi, 1995).

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The Implementation Phase- Accept on the Market and in the Organization

Implementation consists of events and actions that pertain to modifying the innovation,

preparing the organization for its use, acceptance of the innovation by the users and continued

use of the innovation until it becomes a routine feature of the organization (Damanpour &

Schneider, 2006). This phase requires acceptance by the employees and managers, whether it

is a new process or a product (Fuglsang, 2008).Organizations often resist change (Sundbo,

2001) and this must be overcome if implementation is to be successful. Most important is that

the market accepts the innovation (Fuglsang, 2008). This is obvious when it concerns a new

service product, delivery innovation or a market behavior. The organization may do market

surveys throughout the implementation process to measure whether the market accepts the

innovation (Fuglsang, 2008). Implementation of innovation within an organization is the

process of gaining targeted employees’ appropriate and committed use of an innovation

(Klein & Sorra, 1996). The organization’s failure to achieve the intended benefits of an

innovation may reflect either a failure of implementation or the failure of the innovation itself

(Ibid).

2.1.1 Process Innovation and Success Factors

Process innovation is a new and desirable approach to transforming organizations and

improving their performances. It includes incremental improvements rather than radical

changes (Davenport, 1993). It has been presented that a clear approach to process innovation

is really important. Process innovation does not take place in a casual and offhand manner.

The process actually includes the pressure of day to day business, creating a vision,

understanding the existing process and designing new process and organization in detail

(Ibid). Information also is a powerful tool for enabling and implementing process innovation

(Davenport, 1993). It is clear that accurate and real-time information on process performance

is a prerequisite for effectiveness and therefore many processes have as their primary

objective the creation of information (Ibid). Organization and human resources are also

crucial in order to have a successful process innovation and its implementation. How people

are organized and the degree which they are motivated to do their works is critical to the

success of process design (Davenport, 1993). It can be said that process innovation must

occur within a strategic context (Ibid). A vision for process innovation should be closely tied

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to the organization’s strategy. A tight connection between corporate strategy and process

vision can make process innovation initiatives a primary vehicle for implementing strategy,

and with strategy implementation becoming an important source of competitive

differentiation, organizations that are successful at process innovation are likely to be

successful in the marketplace (Davenport, 1993).

Innovation is assumed as key to the organization’s financial performance since it makes

organizations grow faster and more profitable (Van Der Pannes, 2003).

According to Van Der Pannes (2003), successful factors of innovation can be divided into two

major capabilities of organization: technological capability and commercial capability (Ibid).

Technological capability consists of organization-related factors and project-related factors

while commercial capability includes Product-related factors and market-related factors

(Ibid).

Organization-related factors include organization culture, experience with innovation,

characteristics of R&D team and organization’s strategy towards innovation (Van Der

Pannes, 2003).

Project-related factors include project’s complementarity with the organization’s

resources and management style (Van Der Pannes, 2003).

Product-related factors include relative price and quality of the produced products

(Van Der Pannes, 2003).

Market-related factors include market concentration and market introduction (Van Der

Pannes, 2003).

2.1.2 Process Innovation and Organization’s Performance

From a resource-based view of the organization, capability of the organization has been seen

as critical achieving strategic competitiveness (Conner, 1991). Innovativeness is one of the

primary tools of growth which increases the existing market share and provides the company

with a competitive advantage (Gunday et al., 2011). It has the actual potential to enhance the

organization’s performance in several aspects. Particularly, it has been mentioned in the

literatures that there are three different performance dimensions which innovation has an

impact on. These dimensions are financial performance, market performance, customer

performance (Kaplan et al., 1996; Gunday et al., 2011), which will be discussed later in this

section of the paper.

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Concerning the relationship between innovation and performance of the organization,

literatures have described the innovation as an immediate source of competitive advantage

which can lead to an improvement in performance (Camisón & Villar-López, 2012).

Organizations that perform well may have easier access to capital to finance for further

innovations and investments (Koellinger, 2008).

The payoffs of innovativeness in an organization are determined via a market process which

involves not only the activities on the innovator, but also the reactions of customers and

competitors (Ibid). Among the numerous studies which investigate the innovation, very few

have explored the relationship between the adoption of innovations and organizational growth

or performance (Damanpour & Evan, 1984). Most of these studies usually address one

category of innovation such as technical innovations and often neglect administrative

innovations, which are also crucial to the growth and effective operation of an organization

(Ibid). Organizations employ innovation to improve performance or to eliminate a

performance gap which may be caused by changes in the external environment (Ibid).

Damanpour and Evan (1984), suggest that a balanced implementation of administrative and

technical innovations would help the organization to maintain the equilibrium between the

social and technical systems, which in turn would lead to high performance. Innovation is a

main element of entrepreneurial style or posture and several studies have linked

entrepreneurial style to performance (Thornill, 2006). Therefore, innovative organizations are

supposed to perform well (Ibid).

2.2 Corporate Social Responsibility (CSR)

The European Union defines corporate social responsibility (CSR) as a program in which

“companies decide voluntarily to contribute to a better society and a cleaner environment”

(European Commission, 2001). CSR also refers to the enterprises’ active and voluntary

obligation towards environment, society and economy (Garay & Font, 2012). Managers

continually encounter demands from customers, employees, suppliers, community groups,

governments, and some stockholders groups to devote resources to corporate social

responsibility (CSR). CSR actions include going beyond legal conditions in adopting

progressive human resource management programs, developing non-animal testing

procedures, recycling, abating pollution, supporting local businesses, and embodying products

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with social attributes or characteristics (McWilliams & Siegel, 2001). CSR has been shown to

have a positive impact on financial performance (Margolis & Walsh, 2003; Heal, 2005).

Weber (2008) has discussed the benefits of CSR and stated that these benefits can be seen in

monetary and non-monetary terms which can be seen in Figure 1. Monetary advantages

implied direct financial and finances that do not directly lead to cash flows but can however

be measured in monetary terms. An example was, CSR can increase brand value (ibid). Non-

monetary benefits are those benefits that cannot be measure in monetary value but, however

affect the competitiveness and the financial success of the company (Ibid). Non-monetary

advantages can preferably be measured qualitatively, which include improve access to capital

(improving relations with investors without actual capital provisions) and securing the

company's license to operate (maintaining good stakeholder relation) (Ibid). Schaltegger and

Burrit (2005), cited cost reductions, positive influence on shareholders, improved reputation

and brand value as other benefits of CSR for the organization. Furthermore, increasing the

level of CSR activities may result in employees’ motivation and improve their productivity

(Heal, 2005).

Several management literatures have investigated significance of corporate social

responsibility and its relation with financial performance of an organization and as result CSR

has been known as an important corporate duty (McGuire et al., 1988). The researchers who

have suggested a negative relation between CSR and financial performance have argued that

high responsibility may result in additional costs which put the organization at an economic

disadvantage (Ibid). In contrast, other studies which have argued for a positive relation have

cited improved employees and customer goodwill as an important outcome of corporate social

responsibility (Ibid). According to Alexander and Bucholtz (1978), low levels of social

responsibility may increase the organization’s financial risk. Investors may consider a

organization with low social responsibility as a risky investment (Ibid). On the other hand, a

high degree of CSR provides the organization with low percentage of total debt to total assets

and will permit the organization to have low financial risk as the result of more stable

relations with the government and financial community (McGuire et al., 1988). Carrol and

Buchholtz (2003) suggested three causal relationships between CSR and organization’s

performance. The first causal relationship is that good corporate performance will result in a

good CSR standing, and consequently, generates a good reputation. Finally, superior

reputation enhances the overall performance of the organization.

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Figure 1. CSR Impact Model (Adapted from Weber 2008)

2.3 Organization’s Performance

Organization performance is defined as an organization which uses a combination of

productive assets consisting of human, physical and capital resources in order to achieve a

common goal (Carton & Hofer, 2006). These assets lay the foundation for the organization to

create the value (Ibid). As the nature of Swedish municipalities is public sectors, according to

Pollanen (2005), public sector’s performance can be measured by the performance of

organizations, organization units and programs. The importance of organizational

performance measurement is to help organization utilize assets effectively to plan, control and

make decisions, therefore ensuring the objectives and goals will be achieved in a strategic

context (Pollanen, 2005). It can be crucial to analyze an organization’s performance based on

the type of organization, size, competitive environment and other factors (Evans, 2004).

Performance measurement system in public organizations, have a positive impacts on

municipalities’ stakeholder's well-being (Pollanen, 2005). Under this condition, balanced

scorecard which associates with social, political and user-related measures is applicable for

public sectors, for instance, municipalities (Ibid). Balanced scorecard consists of four

perspectives: financial perspective, internal perspective, customer perspective and innovation

and learning perspective (Kaplan et al., 1996)

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Financial perspective: it concerns the business provides to its shareholders, including

profitability, growth in revenue, shareholder’s value and Return on Investment (Kaplan

et al., 1996).

Internal perspective: concerns the internal process which drives the business and

includes service quality, product quality, productivity, cost and cycle time (Kaplan et

al., 1996).

Customer perspective: not only concern customer needs and satisfaction but also

market share. Specifically it includes service level, satisfaction level (Kaplan et al.,

1996).

Innovation and learning perspective: concerns about the successful factors of the

organization for future surviving, which includes assets, employee satisfaction/

motivation and market innovation (Kaplan et al., 1996).

3. Research Model and Research Questions

As mentioned in the previous chapters integration of process innovation and corporate social

responsibility as business goals, will lead to higher performance of the organization. This

chapter therefore, shows this integration as the research model for this paper.

3.1 Proposed Research Model

The purpose of this paper is to get a deeper understanding regarding the impacts of process

innovation in waste collection process on four municipalities’ performances in Sweden. The

15

research model in this study can be seen in Figure 2, which shows the integration of process

innovation and CSR with organization’s performance.

Figure 2. Research Model

3.2 Research Questions

Based on the purpose of this paper and developed literature review, the following research

questions were formulated. If the process is supposed to have positive effects on

organization’s performance, it needs to be successful. Therefore, the first research question

was formulated. Since waste management is considered to be one of the elements of

sustainable development, and this study focused on waste management processes and how

these processes could impact the municipalities’ performances. Therefore, second research

question was developed to investigate the CSR impacts on performances of municipalities.

RQ1. What are the success factors of process innovation in waste collection processes

within the municipalities?

RQ2. What are the advantages of CSR application in waste management processes on

performances of Swedish municipalities?

4 Methodology

This chapter of the paper explains some of the existing research approaches and justifies the

reason of choosing those for this study. A discussion regarding inductive and deductive

Organization's Performance

Process Innovation

Corporate Social

Responsibility

16

research approach and also qualitative and quantitative approach is presented. Research

design, research strategy and data collection method for this study are demonstrated in this

chapter. The chapter ends with data analysis method and quality criteria for quantitative

research methods.

4.1 Research Approach

4.1.1 Inductive vs. Deductive Research

In general, there are two kinds of research, inductive research and deductive research

(Bryman & Bell, 2007). Inductive approach is a method which starts with specific

observations, finding the patterns, formulating hypotheses and eventually drawing

conclusions and developing the theories (Bryman & Bell, 2007), meaning creating theory

from data. On the contrary, a deductive approach is based on the existing theories to collect

data in order to investigate research hypotheses (Bryman & Bell, 2007). It means hypothesis

are deduce based on the theories, which are going to be verified.

In this study, deductive research is applied since the research questions and literature

review are derived from existing theories from previous research. These theories lead to the

research questions about what is going to be investigated.

4.1.2 Qualitative vs. Quantitative Research

Classifying business research into quantitative or qualitative has been found to be very useful

for many researchers (Bryman & Bell, 2007). "Quantitative research provides an account of

structures in social life but qualitative research provides sense of process" (Bryman & Bell,

2007, p.106).

Quantitative research can be seen as a strategy that emphasizes quantification in the gathering

and analysis of data (Bryman & Bell, 2007). It is commonly known that, quantitative research

involves hypothesis that are deduce from theories which need to be tested (ibid). Quantitative

research is also a way of testing particular theories by studying variables, which can be

analyzed statistically (Creswell, 2009).

Qualitative research can be seen as a research strategy that most often accentuate words

instead of quantification in the collection and analysis of data (Bryman & Bell, 2007). It is

more about the way people interpret their world (ibid). When an event or social process is

17

difficult to investigate with quantitative methods, qualitative methods are most suitable and

can provide details and understanding (Ghauri & Grønhaug, 2005). Therefore, qualitative

research approach is common in social and behavioral science as well (Ibid).

In this study, qualitative research method is adapted since in-depth investigation is conducted

to get deep understanding the Impacts of waste collection process in different municipalities.

This study seeks to find out how these municipalities understand the process of waste

collection and how it is carried out.

4.2 Research Design

Research design is how the conceptual research problem has been related to relevant and

practicable empirical research (Ghauri & Grønhaug, 2005). An appropriate research design

ensures the quality of the empirical data and helps researchers to answer the research

questions (ibid). A well designed research should provide an effective approach to solve the

research problem with limited time and resources (Ibid).

In general, exploratory, descriptive and causal researches are the three main researches type

(Ghauri & Grønhaug, 2005). Exploratory research design is normally conducted at the early

stage of the project when the research problem is not well understood. This type of research is

very flexible and involves experiments (ibid).

Descriptive research design is supposed to answer the questions of how something happened

and who was involved, where it happened. Descriptive research provides a detailed

information of an event or situation that is studied despite of quantitative, qualitative or a

combination of methods (Bryman & Bell, 2007). Descriptive design requires the researchers

to define the measurement and the population (Dhawan, 2010).

Causal design is used to seek cause and effect and relationships between different variables

(Ghauri & Grønhaug, 2005).

The purpose of this study is to investigate the impacts of applying process innovation in waste

collection on municipalities’ performances in Sweden. Since this study is well structured and

seeks for detailed information regarding the chosen topic, descriptive research is suitable for

the purpose of the paper (Ghauri & Grønhaug, 2005).

4.3 Data Sources

Data sources can be broadly classified into primary data and secondary data (Ghauri &

Grønhaug, 2005). Primary data are those original data which collects first-hand by researchers

18

to solve specific problem (Ibid). Primary data can be collected from experiments, interviews,

focus groups, surveys etc. While secondary data are collected by researchers for some other

purpose than solving the problems (Bryman & Bell, 2007). Secondary data can be collected

from the websites, publication, libraries and organizations. In comparison to secondary data,

primary data are more reliable since it is conducted by the researchers personally using

surveys, interviews and observations (Ibid). Moreover, for primary data collection, the

questions the researchers ask are tailored which will help them with their study.

In this study, both primary data and secondary data are applied for data collection. Secondary

data are collected for the usage of prerequisite knowledge about the research area of waste

management in Sweden. With the foundation of these data, it will help find out the research

gap and thus formulate the interview questions to gather primary data afterwards. Primary

data collection will be used to get deep understanding about how differently municipalities

deal with the waste.

4.4 Research Strategy

Research strategy will assist researchers in the procedure of data collection and answering the

research questions (Yin, 2009). There are three main conditions which help to recognize the

most suitable research strategy for a study: Form of research question, requires control over

behavioral events and focus on contemporary events (Ibid). These conditions are connected to

five research strategies which are: Experiment, Survey, Archival Analysis, History and Case

Study (Yin, 2009).

Experiment: A methodical process with the goal of verifying, falsifying or establishing the

validity of a hypothesis whereby one or more variables are altered to establish the

differing effects (Yin, 2009).

Survey: Choosing a number of individuals from a population as a sample in order to

making statistical conclusion about the population (Yin, 2009).

Archival Analysis: An observational method whereby researchers examine the documents

or archives of the unit of analysis (Yin, 2009).

History: Collection and analysis of historical documents (Yin, 2009).

Case Study: An intensive analysis of an individual unit stressing developmental factors in

relation to the context and relevant theory (Yin, 2009).

19

The detailed relevant situation for using different strategies is concluded in Table 3.

Table 3. Relevant Situation for Different Research Strategies

(Adapted from Yin 2009, p.8)

Method Condition

Form of research question Requires control

over behavioural

events?

Focuses on

contemporary

events?

Experiment How, Why? Yes No

Survey Who, What, Where,

How many, How

much

No Yes

Archival Analysis Who, What, Where,

How many, How

much

No Yes/No

History How, Why? No No

Case Study How, Why? No Yes

Since this paper investigates the impacts of theories of process innovation on four

municipalities’ performances and focuses on contemporary events, therefore a multiple case

study is only possible choice for the research strategy of this study. Case study examines a

phenomenon in its natural setting with employing multiple methods of data gathering to

collect information from one or few units (people, groups or organizations) (Benbasat et al.,

1987). Case studies are useful in business researches since the phenomena are often hard to

quantify because of its many variables to measure (Ghauri & Grønhaug 2005). Case studies

have more credibility when they consist of multiple cases (Yin, 2009) as it has been done in

this paper.

20

4.5 Data Collection Method

Choosing the data collection methods in research relies on what kinds of data are desired

(Weller and Romney, 1988). According to Bryman and Bell (2007), interview, focus group,

surveys are the applicable methods to collect data.

An interview is guided by a researcher and is conducted in order to obtain information about

the participant’s point of views and opinions (Kvale & Brinkmann, 2009). Interview as a

research method has its advantages and disadvantages. Two of the advantages of conducting

interviews, are, firstly, that the interviewer could explain the question if the responder has

troubles comprehending and secondly that the interviewee is able to respond to the questions

with greater richness (Oppenheim, 2000). In fact, there are several disadvantages in choosing

interviews as data collection methods. One disadvantage of interview can be time consuming

and another is that it could be a risk that the interviewer might affect the answers of the

interviewee (Oppenheim, 2000). According to Bryman and Bell (2007), there are three types

of interviews which referring to unstructured interview, semi-structured interview and

structured interview. Since the nature of unstructured interview and semi-structured interview

is to obtain deep information towards opinions and attitude, interviewer’s skill are highly

required. In unstructured interviews, questions and answers are not structured and the purpose

is to help the researchers to understand how and why of the questions regarding to the chosen

study (Ghauri & Grønhaug, 2005). Moreover, in unstructured interview, Interviewer’s task is

to give the focal topic and lead the interviewee to give their opinions thus the interviewee is

fully given the liberty to react and discuss (Ghauri & Grønhaug, 2005). Semi-structured

interview is open and allows different ideas and questions bringing up during the interview

session. In semi-structured interview, questions are prepared beforehand and the types of

questions are close questions, open-ended questions and followed-up questions ( Bryman &

Bell, 2007). Open-ended and followed-up questions allow the respondents freely to give

opinions according to their own thinking without any constraints by a few alternatives (Ibid).

In structured interview, a rigorous set of questions are systematically designed which requires

a set of answers for the quantitative purpose (Ibid).

Focus group is known as one of the qualitative research methods which is widely used in

business research area. “In management and business, early use of the focus group technique

was also seen as a way of helping individuals to define problems and work together to

21

identify potential solution” (Bryman & Bell, 2007, p 511). The focus group method has many

benefits which includes the fact that it can be used at an early stage of design process to bring

in the participant’s feelings and the opinions about the system or products to be designed

(Krueger & Casey, 2008). The focus group research method is a group interview in which

consists of one moderator and several participants discussing several questions on a specific

chosen topic (Bryman & Bell, 2007). What the focus group method differs from other

qualitative research methods is, focus group method emphasizes on the interaction between all

participants (including the moderator) within a group (Ibid). According to Bryman and Bell

(2007), the numbers of the individuals in a focus group should be from twelve to fifteen, and

within them, six to ten should be involved in discussing the theme and, the rest should take

charge of being moderator, making notes, or serving the participants during the break.

Survey is a quantitative method to collect standardized data by interviewing a representative

sample of certain population (Bryman & Bell, 2007). Survey is a method to identify principles

about the sample design, data collection instruments, statistical adjustment of data, data

processing, and final data analysis in order to draw systematic conclusion (Ibid). Survey is

based on a certain sample of the population, so defining the target population is the

fundamental. That target population can range from the general population of a given country

to people those who share similar characteristics. In comparison to qualitative interview

method, standardized survey questions provide all the participants with a standardized

stimulus and it is easy to analyze the data with well-designed questions (Ibid).

Since the researchers decided to carry out qualitative research method in a small scale in this

study, interviews have been chosen. Semi-structured interview has been designed in order to

get a deeper understanding towards different respondents.

This paper carried out four interviews to gather required data. In order to conduct the

interviews for this study, several phone calls were made to chosen municipalities in order to

find the right person for interview and provide enough information to carry out the study. The

interviewees were contacted by phone calls in order to set the date and time for meeting.

There were three communication managers in waste management section and one operational

manager in waste management department who were interviewed. Before conducting the

interview, interview guide was sent to respondents to give respondents time to review the

questions and inform us in the case of any problem or some of the questions were outside of

22

their area of knowledge. The interviews were conducted at municipalities’ waste management

departments and lasted approximately for one hour.

4.6 Data collection Instrument

4.6.1 Operationationalization and Measurement of Variables

Operationalization is the process to transform abstract theories into an empirical and

applicable concept in a research (Bryman & Bell, 2007). Operationalization is a crucial part in

any research which aims at obtaining relevant information and draw accurate conclusions. It

involves four basic steps which are theoretical insights, listing potential variables, selecting

the variables and collecting data. When moving from an abstract theoretical level to the

concrete and practical level, the researchers have to define the concepts within the study

(Ibid).

Three theories were used in this study; Process Innovation, CSR and organization’s

performance which they are shown in Table 4.

Table 4. Operationalization

Concept Concept Definition Operational Definition Measurements

Process

innovation

“A new and

desirable approach

to transforming

organizations and

improving their

performance”

(Davenport, 1993,

p.299)

A measure to reflect how

municipalities deal with

innovation in waste

management processes.

Idea

(Fuglsang, 2008)

Development

(Fuglsang, 2008)

Implementation

(Fuglsang, 2008)

23

Corporate

Social

Responsibility

(CSR)

a concept whereby

companies

decide voluntarily

to contribute to a

better society and a

cleaner

environment’’ (

European

Commission, 2001)

A measure to show how

CSR can be beneficial

for the municipalities

waste management

department.

License to

operate(Weber,

2008)

Capital access

(Weber, 2008)

Organization

Performance

“an organization

which uses a

combination of

productive assets

consisting of

human, physical

and capital

resources in order

to achieve a

common goal

(Carton & Hofer,

2006).” (Carton &

Hofer, 2006)

A measure to reflect the

Municipalities’

performance dealing

with waste management.

Financial (Kaplan

& Norton, 1996)

Internal

process(Kaplan &

Norton, 1996)

Customer (Kaplan

& Norton, 1996)

Innovation and

learning (Kaplan &

Norton, 1996)

4.6.2 Interview Guide

An interview guide is a list of questions which used in the interview to help collecting data in

order to solve research problems (Ghauri & Grønhaug, 2005; Bryman & Bell,

24

2007). Questions in the interview guided should be compared with research question,

therefore the consistency can be linked and relevancy can be reached (Ghauri & Grønhaug,

2005).

The interview guide for this study is available in Appendix 1.

4.6.3 Pretesting

Pretesting is a good credible way of preparing the actual data collection (Ghauri & Grønhaug,

2005; Yin, 2009). It is the procedure which the researcher seeks out if the questions are

comprehensible, relevant, complicated in current condition (Ibid). According to Bryman and

Bell (2007), a pretest of an interview guide can be carried out by individuals with special

knowledge of the topic of chosen or different people in different knowledge areas.

In this study, three pretests were made. Two of them were sent to the Ph. D. researchers in

Linnaeus University and the other one was sent to the associated professor in Business School

of Leeds University.

4.7 Data Analysis Method

Since massive volume of collected data is a main characteristic of qualitative research, data

analysis is considered as a complex and challengeable part of the qualitative research process

(Savage, 2000). Therefore, when carrying out a qualitative research approach, the proper way

to analyze data is Data Reduction, Data Display and Conclusion Drawing (Miles &

Huberman, 1994).

Data Reduction: This process includes selecting, simplifying, abstracting and

transforming data in order to organize data in a way that the final conclusion can be drawn

straightforwardly (Miles & Huberman, 1994).

Data Display: The process of presenting the data in a well-organized and simplified

assembly. Besides using only text, it has been suggested to also employ charts, graphs and

matrices (Miles & Huberman, 1994).

Conclusion Drawing: The process of finding patterns and flows in collected data and

demonstrate what they really mean (Miles & Huberman, 1994).

Since the research strategy of this paper is a multiple case study, this situation enhances the

possibility for generalization and deeper understanding regarding the chosen purpose of the

25

study (Miles and Huberman 1994). The three steps approach which are mentioned earlier for

analysis of qualitative data, have been used in this paper. Firstly, all the collected data

including primary and secondary have been transcribed precisely. Secondly, the gathered data

were reduced and tagged accordance with the theoretical construct. This process carried out

with the help of the operationalization table which shows the connection between the data and

relevant theories.

Finally, the relation between the tagged data and specific theory was represented in a simple

way in text format. As Miles and Huberman (1994) suggested, the summarized empirical data

and relevant theory are presented in a table in order to be more comprehensive.

4.8 Sampling

According to Bryman and Bell (2007), sampling is taking a little group from a large group to

represent a population in an investigation or a research. Where the population is the world in

which the sample is been chosen (ibid). Ghauri and Grønhaug (2005) talk about economical

and time as two main important reasons for taking a sample instead of the whole population.

4.8.1 Sampling Frame

The sampling frame is where the sample is selected, it is a list of all those within the

population that can be sampled.

In this paper, a qualitative approach is used, implying the interest is to get a deeper

understanding of the field of study through interviews. 4 out of 290 municipalities were

interviewed. This paper focuses on understanding how process innovation in waste collection

has impact on the municipalities’ performances in Sweden, and since the municipalities are all

govern by the State and have some laws to follow, they all basically follow the same

instruction.

26

4.9 Quality Criteria

4.9.1 Content Validity

According to Polite and Beck (2006), information about the content validity of the measure is

truly necessary in drawing the conclusion of the research. Content validity, also called face

validity, refers to the concept of how the measures which are used in the study actually

measure what is needed to be measured. A person with enough knowledge about the subject

can review and improve the content validity of the research (Ghauri & Grønhaug, 2005).

In this paper in order to make sure regarding the content validity of the paper, the interview

guide and operaionalization scheme were sent to researchers in Linnaeus University.

Afterwards, feedbacks were used in order to raise the quality of interview questions and

improvements.

4.9.2 Construct Validity

According to Ghauri and Grønhaug (2005), construct validity is about how exact the

operationalization measures the concept which it is supposed to measure. The validity of the

construct of this paper has been maximized by pretesting the interview guide which was sent

to some experts and students.

The paper was also sent to the supervisor and some student who made constructive criticism

on the paper which was adjusted. The interview questions was sent the interviewees before

the interview was made, so that the interviewees had time to go through the questions and

have the possibility to check with colleagues the answers to the questions which they were not

sure of and to save time. Three out of four interviews were recorded, which provided the

researchers with opportunity to listen again and help them in writing the transcript of the data.

4.9.3 External Validity

External validity refers to the extent to which finding can be generalized across a different

context within the population (Bryman & Bell, 2007).

27

The result of this study is applicable to other Swedish municipalities which have not yet

planned to use the new waste collection method and it can be generalized to organizations in

countries with similar characteristics like Sweden and their municipalities.

4.9.4 Reliability

“Reliability refers to the degree to which a study can be replicated (Bryman & Bell, 2007, p

410)”. Since qualitative research depends on a certain amount of people’s participation, the

researcher must ensure the information that offered by participants are reliable during the data

collection process. The method to ensure reliability is to ask for clarification when facing an

ambiguous answer. Moreover, it is important for research to verify some basic fact by

searching more information to ensure the credibility of the data (Bryman & Bell, 2007).

4.10 Chapter Summary

Table 5 showed the summarized research methodology of this study.

Table 5. Research Methodology in this Study

Research

Methodology

Employed in the Study

Research Approach

Research Design

Data Sources

Research Strategy

Deductive & Qualitative

Descriptive

Primary and secondary

Case study

28

Data Collection

Method

Sampling

Data Analysis Method

Criteria

Semi-structured interviews

Multiple case sampling. Four cases of four Swedish

municipalities.

Data reduction, Data display, Pattern matching and conclusion

drawing

Validity and reliability

5. Empirical Investigation

In this chapter, both secondary and primary data are presented. Primary data are those

gathered from conducted interviews which are presented in accordance with the theories

explained in the literature review part and secondary data refers to collected data from

websites, publications other resources.

5.1 Secondary Data

5.1.1 Swedish Municipalities

Sweden is divided into 290 municipalities and 20 county councils which are governed by

State (Swedish Government) (SALAR, 2010). There is no hierarchical relation between

municipalities, counties and regions, since all have their own self-governing local authorities

with responsibility for different activities (Ibid). In Sweden, municipalities are responsible for

providing public services as in most other countries and they have the right to levy taxes to

29

finance their operations (Ibid). They have different roles such as providing services,

developing society and employment (Ibid). Municipalities in Sweden are legally responsible

for following activities (SALAR, 2010):

Childcare and preschools

Primary and secondary education

Care of the elderly and disabled

Social services

Water supply and sewerage

Infrastructure, traffic, public transport

Plan and environmental issues

Rescue services and emergency preparedness.

This purpose to collect secondary data is to understand the municipality’s responsibility is the

foundation of this study. On this basis, it helps the researchers to conduct future interviews to

collect primary data regarding the municipality’s performance.

5.1.2 Waste Management in Sweden

The European Commission has proposed a new Environment Action Program for the EU,

entitled "Living well, within the limits of our planet". The proposal aims to enhance

Europe's ecological resilience and transform the EU into an inclusive and sustainable green

economy (European Commission, 2012). Sweden has a good track record when it comes to

recovering material, energy and nutrients from waste (Avfall Sverige, 2012). Generally, waste

in Sweden is divided into domestic refuse, industrial waste and hazardous waste (Hartlen,

1996). Domestic refuse includes bulky waste and yard waste from households, industrial

waste refers to specific industrial waste such as forestry and mining and hazardous waste is

the industrial waste which may has an effect on environment and should be handled in a

special way (Ibid).

It is the obligation of the municipalities to have a waste management plan and have the

responsibility of collecting and disposing of household waste, excluding the product

categories covered by producer responsibility (Milios, 2013). The municipalities have the

right to issue some rules regarding the management of household waste, which can include

30

fees for collection and handling the households waste (EIONET, 2009). The separation and

disposition of waste at various available collection points maintained by the municipalities is

the responsibility of the households (Milios, 2013) which is the result of the law of banning

land filling. Households also have the obligation to follow the municipal waste management

regulation (ibid). Waste arising from producers product, are the responsibility of the producer

(Avfall Sverige, 2011). The traditional method to handle wastes in Sweden is to incinerate

and recycle them. The amount of wastes which went to landfill has decreased dramatically

from 22% in 2001 to 1% in 2010 (Milios, 2013). In 2002, the law of banning land filling was

passed and therefore, all the Swedish municipalities started a new waste collection method

which sort out the waste into different categories in order to reduce land filling and produce

useful material such as biogas, electricity and heating.

5.2 Primary Data

5.2.1 Case Kalmar

Kalmar municipality is included in Kalmarsundsregionens Renhållare (KSRR) together with

Nybro, Mörbylånga and Torsås waste collection area (KSRR, 2012). KSRR is responsible for

the collection and treatment of household waste in Kalmar, Mörbylånga, Nybro and Torsas

municipalities. KSRR is a municipality association, which means they have counselors and

directors and governed by municipality law. The politicians who are elected as representative

of the municipalities take decisions on what has to be done regarding the collection and

treatment of household waste. For example the officials of KSRR then design the best

business process to archives the goals of the politicians.

The implementation of the new waste management/collection method started in 2002 and it is

an ongoing process. Before, waste management process was handled by Kalmar municipality

itself, but over the years it has been outsourced to different companies, and now it is handled

by Kalmarsundsregionens Renhållare (KSRR).

Process innovation

31

In 2002 the law of prohibiting combustible waste on the landfill was passed. In order to

reduce the combustible waste, the municipality needed to look for new ways to handle the

waste and hence the waste collection process. Kalmar municipality tried to do this by looking

at how other municipalities were doing. In order to implement this new process, they went out

to the public and tried to inform them with newsletters, radio and other media. Their website

was one of the ways they also use to inform the public. The new collection method implied

the sorting of the waste in different categories, that is plastics, metals, bottles etc. This waste

are all put in a recycling station, which are available around apartments. People living in villas

have just one bin, which is collected by the municipality weekly or monthly depending on

where the people live, and for other waste the owners of the villas have to drive to one of the

main recycle centers that are located in various points in the municipality. In order for the new

process to be in place, they needed a mandate from the government to do this whole new

process of recycling and open recycling stations. In order for them to have as less resistance

as possible to this new process, they went out and educated the public and the employees

about the benefits of the new process and how it is going to make the life of the citizens in

this municipalities better. The implementation was done in different phases, and it is still

ongoing with a new phase to come in 2014, which will involve the production of biogas. In

Kalmar municipality they have a zero vision goal to reduce land filling as much as possible

and to do this in the most efficient way as possible.

CSR

KSRR is a municipality association, which means they have counselors and directors and

governed by municipality law. The politicians who are elected representative of the

municipalities take decisions on what has to be done, like for example, now more disposal of

landfill waste and the officials of KSRR then design the best business process to archives the

goals of the politicians to eliminate landfilling. This implies that their relations with the state

are inevitable. KSRR work under the States legislations and are supposed to report their work

to the State annually. According to the interview, KSRR is planning to have good relations

with its business partners like the station that will be buying the biogas so as to maximize

production and produce more efficiently. For the moment, KSRR is not really interested in

having more waste, but in the long run they might want to increase the production of biogas

for example to meet the demand and might try to expand the their field of operation.

32

Organization’s Performance

At the municipality main building in Kalmar, they have made places where people can leave

stuff that are still in good shape like furniture, that can later be transported to a second-hand

shop, where it is then sold and the money is sent to charity. For the household waste, they do

not produce any product with the waste in Kalmar for now, since the waste is transported to

other parts of Sweden,but they have a future plan to produce biogas, fertilizer and fuel to use

in cement manufacturing. This new process will generate a lot of biogas, and hence producers

of cars that use biogas will want to invest more in Kalmar since it one of the problems the

biogas car manufacturers are facing today, that is, lack of biogas stations. Compare to what

was in place before 2002, the processes they are having now is relatively cheaper and result in

a better environment, this is one of the main advantage of the present waste

management/collection process. The new phase that will start being operational in 2014 is

expected to be relatively more expensive in the short run but in the long run, it will be cheaper

for the municipalities, since a lot of cost will be saved from the transportation of the waste to

Norrköping and Öland as it is done today and will get some revenue from the production and

selling of the by product, like the biogas. KSRR, have a customer service that take complaints

and call the customers to assure a good customer service. To help measure the degree of

customer satisfaction, they usually sent out surveys to the customers asking about the

collection process and if they are satisfied or if there is something they will like to

improve. According to the report from the customer service most people are very positive

about how the waste management and collection method have improve and is continue to

improve over the years. Also, most of the customers did like the idea of sorting of the waste,

this made them feel like they were part of the process of improving the environment. And

with this new process they hope the customers’ complaint will decrease, since they are also

working to implement some markers on the bins, to insure collection, through verification of

collection from KSRR station office.

5.2.2 Case Karlskrona

Karlskrona municipality is a southern coast city of Blekinge County. The city started the new

waste collection method project from 2002. The project was done by the Affärsverken which

33

is a municipally owned company that builds, develops and operates infrastructure in

Karlskrona. Affärsverken has six business areas: power grids, electricity, heating, cleaning,

boat traffic and metro networks (Affarsverken, 2013). The clients of Affärsverken include

households and business organizations which are mainly located in Karlskrona.

Process innovation

Karlskrona municipality has started adopting the new waste collection method step by step

since 2002. This new method includes sorting out different categories of wastes into different

bins for diverse usages. From 2002 combustible waste had to be sorted out and incinerated. It

was by law prohibited to deposit combustible waste on landfill. In order to reduce the

combustible waste, the municipality decided to sort out the biodegradable fraction and treat it

separately in a composting plant. This new system proposal was provided by Affärsverken

which is Technical Board of Karlskrona Municipality (TK). For the implementation of the

new sorting and collecting system, a consultant from Västerås was hired. Västerås is another

municipality with the same scenario. To take care of the biodegradable waste, a composting

plant was built in 2002.The implementation plan which took three years to be done was as

follows by 2005: collecting and sorting out the waste into three different categories which are

combustible, biodegradable and landfill deposit waste. Afterward, each category was

transported to a specific plant for further operations and transformations. In the early stage of

implementation phase, there were skepticisms from both customers and employees’ sides. In

order to convince them to change their attitudes and perceptions towards the new recycling

method, detailed information and know-how were shared and advocated constantly. The

households were informed by arranged evening events and contacted by the municipality

communicators who visited people or called them. The aim was to reach 90 % of the

population by direct contact or by phone which was fulfilled. Meanwhile, reports and

presentations within the department were conducted to ensure the implementation was

successfully carried out. In 2012, the implementation of the waste collection process from the

summer cottages was implemented instead of the owners to bring the waste themselves to the

disposal points.

In order to implement new process innovation successfully, Karlskrona municipality hired

experienced consultant and experts to conduct this project, meanwhile, sharing information to

employees to make the whole project team understand the goal and objective. The mission of

34

this process innovation is to decrease the landfill. With the help of experts, the best practice

which could gain efficiency has been designed to match the condition of Karlskrona

Municipality.

CSR

Karlskrona municipality's work is under the States legislation and they are required to report

the work to the State annually. There are few Key customers who have been contacting

frequently and try to meet their demands and satisfaction. The municipality is not interested

in getting more waste since it would increase the workload. Right now they are not producing

so many products from those wastes and the only thing to ensure is the wastes are all collected

and the environment is clear.

Organization’s Performance

Technical board of Karlskrona Municipality keeps track and tries their best to ensure each

collecting point is collected in time. However, due to the weather condition, they cannot make

100% sure that each point is collected effectively. In winter, some of the household waste are

froze in the bins, it takes longer time to defrost before dragging them out. In comparison with

other municipalities, the advantage of Karlskrona municipality carried out through the sorting

of household waste treatment of biodegradable waste long before most other communities

which is in 2002.Moreover, they also put more effort into engaging and informing households

about the system than most other municipalities has done. It has been cheaper to compost

biodegradable waste than to incinerate it since Karlskrona has to pay to use other

municipality’s incineration plant. At this moment, the cost of new system is more expensive

than before since the investment on new equipment and the labors are much higher. But in the

long run, the cost will be reduced. Changes are carried out together with the employees; all

ideas that may improve or simplify the work are discussed. They open their mind and

encourage employees to generate ideas. There is no actual reinforcement, but they received

compliment which will motivate them in their future work. The employees sometimes come

up with ideas about how can be improved to be more environmental friendly in the waste

collection method. Moreover, they are also willing to help people to solve the problems

35

concerning to the waste classification.

Only 2.5 percent of the collected waste went into the landfill and the rest were utilized to

produce new products, new energy, electricity, heat and compost. Affärsverken contributes

through information, energetic customization and wise management of the waste per person

per year decreases. At present, the power plant is in operation, Affärsverken offer locally

produced electricity and heating. The new facility is a grand environmental investment in

renewable energy sources and contributes to fewer emissions, reduced dependence on oil and

less strain on the environment. It brings good effects for the entire Baltic region, but also the

surrounding area. The district heating network is being expanded, and as more and more

connected, there are fewer oil burners around the municipality. It is perhaps in the daily

service as Affärsverken inspires most of continuous improvement and environmental

awareness. As a provider of important social functions, Affärsverken can help clients going

green - within the household recycling or Energy Company.

Degradable waste from other, three neighbor municipalities has been treated in the composting

plant in Karlskrona. Their interest is to find an alternative to incineration. However, the new

waste collection system was implemented, there was no cost reduction. And the collecting

system is much more complex than before. The sorting system involves 3 fractions with 2

different bins, distribution of bags for the biodegradable waste and sacks for the deposit fraction.

The trucks have to be adjusted to collect 2 or 3 fractions with different intervals.

The public are supportive and holding a positive attitude towards the waste collection. In order

to deal with the customer complaints, there are several female employees in Karlskrona

municipality takes charge of answering telephone calls, communicating with customers. By

implementing the new method, the customer’s complaints were decreased than before.

However, Karlskrona municipality does not have any standard measurement to measure

customer satisfaction. And Technical Board is planning to have interactive survey or activities

with their customers.

36

5.2.3 Case Lund

Lund municipality is a municipality in Skåne County, southern Sweden. The City of Lund is

actively pursuing several programs designed to achieve long-term sustainable development

and takes environmental protection very seriously. These efforts involve many of the City

departments and span across multiple areas of operations such as waste management and

clean transportations.

Process innovation

When the municipality representative was asked about the reason for applying the new waste

collection method, the interviewee stated that municipalities in Sweden generally follow the

instructions by state and their municipality is not an exception. They also have several

researchers who help them to improve the processes of handling waste. They needed higher

purity for collecting the waste and therefore, the idea of a new waste collection system came

up. In order to achieve this goal, the municipality started to educate both employees and

customers to decrease the resistance which they may face. Eventually they designed the plan

for the new collection system. Afterward, in 2007 they step by step implemented the designed

plan and developed a system to aid the recycling in the convenience of households. The new

system uses two bins that are divided into four compartments. Emptying the bins is done by

four compartments vehicles that empty all four fractions in the bin into one single cycle.

According to the interviewee’s response, Lund municipality has employed the innovation into

waste collection process in order to increase the efficiency of the process. Increasing the

efficiency and improving the process are the main goals of Lund municipality and all the

activities by municipality are considered as business strategies to achieve these goals.

CSR

The interviewee also stated that they proposed their new system to state and it was accepted.

Therefore, the new system is considered as the municipality core competence which makes

them different from other municipalities. And approximately thirty municipalities in Sweden

use their system now. According to interview, Lund municipality has several programs to

37

motivate its employees and providing them a better working environment. The employees will

be rewarded if they can increase their functionality. When the interviewee was asked about in

which ways they can ensure that all the waste will be collected, the response was by educating

both staff and customers concerning the several advantages of the new collection system. In

this way they will be motivated by themselves.

Organization’s Performance

The new collection system has caused in several cost reductions in the long term and has

motivated the employees to involve themselves into municipality’s activities. The new system

provides the municipality with higher purity of waste collection and consequently with higher

purity they can produce more products such as biogas, electricity and heat water. When

production increases, they can entice more business partners and gain higher profit. The

interviewee was also asked about the public’s perception toward the new system and in

response it has been said that the majority of households have positive thoughts about the new

system and the municipality send out surveys every two year to understand their customers’

perception and level of satisfaction regarding municipality’s activities.

5.2.4 Case Växjö

Växjö municipality is in charge of collecting and treating the waste in the whole municipality.

Växjö municipality is located in the south of Sweden called Småland. The waste collection

process was outsourcing to a private company. Most of the waste is recycled in different

ways.

Process innovation

Based on the information gathered from interview, Växjö municipality was trying to start a

new environmental program for the city in order to have clean water and environment. There

were several laws which pushed them to have a new waste collection system (National ban on

land filling 2002/2005 and Law of municipal waste planning 1992). Consequently, the

municipality started using the new system which is as follows: There are two separate bins for

each household; one bin for burnable waste and another one is for food waste. The bins are

emptied by special vehicles which carry out the emptying process automatically. In order to

38

be successful in new waste collection system, the municipality hired some consultants and

experts to design the whole process. They also needed support inside the organization to be

able to communicate with customers and educate them regarding the benefits the new system

had. In order to make sure that the all the waste is collected they installed GPS maps in waste

collecting vehicles and in every household. By doing this they are able to monitor the

collection process. From 2012 and after applying the new collection method, the municipality

is able to produce biogas, methane gas and electricity. The municipality of Växjö is known to

be one of the greenest cities in Sweden, so being green is very important for the image of this

municipality, said the interviewee. She also added that like all the other municipalities the

reduction of landfill is one of the main objectives of the new process.

CSR

It is the state that decides on the new laws when it comes to how much waste should be

deposit on land fill and the amount of pollution acceptable. Växjö municipality finds a way to

meet this goal by developing new waste collection and treatment methods. And this methods

need to be approved by the state, so the relation with the state is very important. The state can

also help the municipalities with ideas and funds. The municipality has established good

relation with is potential customer, who are mainly the gas stations that sale the biogas that

municipality produces from the food waste. For the moment Växjö municipality is not

interested in getting more waste from other source for the production of new products, since

there is not enough market (for now), but it might be the case in the future. The municipality

also tries to motivate its employees for creative ideas and reinforce them with small gifts.

Organization’s Performance

Due to using the new waste collection system, the municipality had several cost reductions.

For example in 2012 the cost of handling waste for each private house was 1945 SEK which

is lower than the time before using the new system. Another benefit they get from this

collection method is attracting more business partners. In other word, with application of new

system, the municipality can produce biogas and other products and consequently increase the

number of business partners. They also send out surveys to each household to understand their

customers’ perception regarding the municipality’s activities and according to a recent survey,

majority of households have positive opinion about the new waste collection method and are

like the idea of sorting for the environment.

39

5.3Chapter Summary

In this chapter, both primary data and secondary data were presented in order to find the

relevant information which is related to this study. And a summarized empirical data towards

different cases can be seen in Table 6.

Table 6. Summary of Emprical data

Theory Case Kalmar Case

Karlskrona

Case Lund Case Växjö

Process

innovatio

n

-The

implementation

plan was

outsourced by

the other

company

-In development

stage, Informed

public and the

employees

inside the

municipality.

- The process

was

implemented in

a step by step

manner

-The idea was

generated from

the experts and

employees.

-Hired a

constant to

design the new

system plan.

-Started the

process in 2002

and

implemented by

2005.

-Resistance

from both

external

customer and

internal

employees

-Motivated and

train the

employees

-Built closer

relationship with

customers, kept

contact

frequently

-Continuously

improvement

-The new

waste

collection

method

implemented

with the help

of Researchers.

- Educate

employees to

motivate them.

- The process

was

implemented

in a step by

step manner

-The waste

collection

method model

was learnt from

Lund

-In development

stage, inform

public and

customers in

order to get

accepted

-Motivate

employees and

reward them.

- The process

was

implemented in a

step by step

manner

CSR -Work under the

States

legislation

-Work under

states legislation

-Not interested

in increasing

-Work under

states

legislation

-Work under

states legislation

-Establish good

relationship with

40

-Establish good

relationship with

customers

-Not interested

in increasing

amount of waste

at present

-pay attention to

environment

amount of waste

at present

-pay attention to

environment

-Establish

good

relationship

with customers

-Not interested

in increasing

amount of

waste at

present

-pay attention

to environment

potential

customers

-Not interested

in increasing

amount of waste

at present, since

the biogas plant

was built; more

demand will be

needed in the

future.

-pay attention to

environment

41

Organizati

on’s

Performan

ce

-Produce

compost

-Produce

electricity

-satisfy

customer needs

-learning in the

organization

-motivate

employees

-Produce

compost

-produce

electricity

-satisfy

customer needs

-learning in the

organization

-motivate

employees

-Produce

compost

-Collect food

waste for other

company to

produce

biogas.

-Produce

electricity

-satisfy

customer

needs

-learning in the

organization

-motivate

employees

-Produce

compost

-Produce biogas

locally

-produce

electricity

-Produce

methane gas

-satisfy customer

needs

-motivate

employees

-reinforce

employees

-learning in the

organization

6. Analysis

This chapter explains the linkage between collected data and theoretical framework of the

study. The application of process innovation, CSR and their impacts on organizations’

performances are presented.

6.1 Process Innovation

Process innovation is divided into different steps (Damanpour & Schneider, 2006) which

according to Fuglsang (2008), are idea phase, development phase and implementation phase

and according to the empirical findings, all the municipalities applied these different phases to

carry out the innovation process. According to Damanpour and Schneider (2006), initiation of

innovation involves such activities to recognizing a need and searching for solutions. In 2002,

the landfill waste was becoming increasing and affecting the population and since the

population is growing they had to find a way to reduce the landfill. Hence the law was passed

by EU to reduce the environmental impacts on the planet. Sweden being one of the members

42

of EU, passed a law of reducing landfill and sorting out the waste in 2002, then the

municipalities had to find a way to achieve this by bringing a new waste management and

hence waste collection method. Therefore as mentioned in the empirical chapter of the paper,

each municipality started coming up with its own ideas of waste collection and sorting out.

These ideas were the result of interaction among managers, group of experts and employees.

This is in accordance with Fuglsang (2008), who stated that, managers, employees and

customers are the most important idea makers and best ideas come from interaction among

these actors.

After the idea generation phase the municipalities had to start looking for a way to implement

the process. This phase consists of making the decision to accept an idea as desire solution

(Meyer and Goes, 1988). This was done mainly by a project group which consisted of a

project leader and other members of the municipality designated specially for the project. This

is also matched with mentioned definition of development phase in literature review chapter,

which states that this phase is typically done by establishing a project group that has the task

of developing the idea (Fuglsang, 2008). Also, in Karlskrona, some of the employees resisted

to the new waste management/collection method in the beginning, but this was solved by

motivating and educating the staffs which are in accordance with Fuglsang (2008), that talk

about motivation of the project group and their activities for problem solving. The

development phase also included educating both employees and customers regarding the new

waste collection method and designing a step by step plan for the whole process. Gathered

information represented that Växjö municipality used the idea of Lund municipality. The idea

was designed to have two separate bins for each household in order to throw burnable waste

and food waste separately. This attempt was done because these two municipalities have the

goal of producing biogas from the collected food waste. Kalmar and Karlskrona developed

different ideas for collecting the waste. They designed one bin for each household since they

had not yet thought of the production of biogas which is the main reason why the other

municipalities separate the household waste.

According to Fuglsang (2008) and Klein and Sorra (1996), after developing the idea, the

organization needs to move to implementation phase. This part of the process requires

acceptance of the developed idea by employees and customers. Based on the empirical

findings, all the municipalities’ employees did accept the new process even though there

were some resistance in one municipalities from employees for instance in Karlskrona

municipality. Additionally, according to research findings, most of the customers in all the

43

municipalities had positive perceptions toward the new process. Fuglsang (2008), also stated

that the organization may do market surveys throughout the implementation process to

understand the market acceptance. Gathered information also represents that all the

municipalities did accept the new waste collection and sorting out the waste as the process

innovation and this process has become a routine within these municipalities. Damanpour and

Schneider (2006), emphasize on the implementation phase as the process of acceptance of the

innovation until it becomes a routine feature of the organization.

Davenport (1993) stated that process innovation includes incremental improvements rather

that radical changes. Empirical findings in this study show that all of the four municipalities

view the process innovation as a continuous process which needs to be implemented

gradually. Furthermore, research findings demonstrate the municipalities had a project group

in the early stage of implementation of process innovation. The members of these project

groups were motivated and dedicated to carry out this task in the best possible way. This is

related to Davenport (1993), who mentioned that organization, human resources and how

people are organized within the organization are critical to the success of a process. As

mentioned earlier according to the law of banning landfill all the municipalities had to employ

a new strategy to reduce the landfill and increasing the process efficiency. Therefore, as

empirical data shows all of the municipalities mentioned that reducing landfill and increasing

the process efficiency has been set as their goals and the new waste collection method as their

strategy to achieve the desired goals. In this direction, Davenport (1993), also cited that

process innovation must occur within a strategic context and a vision should be closely tied to

the organization’s strategy.

6.2 Process Innovation Impacts on Organization’s Performance

According to Davenport (1993), process innovation leads to major reductions in process cost,

improvements in quality, service levels and other business objectives. All the municipalities

have stated that using the new waste collection system has resulted in several cost reductions

in some field such as transportation and will contribute to higher profitability in the long term.

According to Gunday et al (2011), innovativeness is one of the primary tools of growth which

increases the existing market share and provides the company with a competitive advantage.

44

The new waste collection method enables the municipalities to produce more products from

collected waste and increase their market share. These products which are biogas, electricity,

heating and compost are produced as result of applying process innovation in the waste

collection processes within the municipalities. These new products give opportunity to

municipalities to create new markets to penetrate in and hence increasing their market share

with selling earlier mentioned products to gas stations, electricity and agricultural companies.

Before using the new system, most of the collected waste was dumped into the landfill by

municipalities. As mentioned earlier because of the law of banning landfill in 2002,

municipalities started to improve the waste management processes by applying process

innovation in order to follow the law and reduce the landfill. This attempt was done as

Damanpour and Evan (1984), stated that organizations apply innovation in order to eliminate

a performance gap which may be caused by changes in external environment.

According to Adner and Levinthal (2001), successful process innovation may result in cost

reductions and eventually lead to increasing the profitability of the organization. Based on the

empirical data in this study, municipalities are able to produce wide range of products by

using the new waste collection system. Therefore, they will be able to entice more business

partners and sell their products in order to gain higher profitability. The empirical data also

shows that the level of customer satisfactions increased by applying the new waste collection

system which according to Weber (2008), high level of customers’ satisfactions can increase

the brand value of municipalities and eventually leads to higher performance of the

organization.

6.3 Corporate Social Responsibility (CSR)

According to Garay and Font (2002), CSR involves organization’s voluntary participation in a

better environment. This can be seen as the main goal of all the municipalities since the nature

of their activities is to provide a better environment for the citizens. Specifically, Lund and

Växjö have contributed to CSR activities in a clear way with using a completely new system

45

which increases their efficiency in waste collection process and enable them to produce

biogas, electricity etc. Therefore, the new system can be considered as a competitive

advantage which is a non-monetary benefit for these municipalities as a result of increasing

the level of CSR activities (Weber, 2008).

Gathered data demonstrated that all the municipalities put their efforts on finding new ways of

handling the waste in the best possible way by constant innovation of the waste management

processes. According to empirical, one of the consequences of efficient waste management

process was enabling municipalities to produce biogas, electricity, fertilizer etc. For instance,

Växjö and Lund are already involved in the production of biogas, while Kalmar is preparing

to start the biogas project in 2014 and Karlskrona is considering the process as a future plan.

By looking for the most efficient ways of handling the waste, they are at the same time

improving their relationships with the State and the customers who are the main investors of

municipalities and they value knowing that the waste are utilized in the best possible way

(McWilliams & Siegel, 2001). Therefore the State and customers are willing to invest in the

municipalities to improve the waste management process. This also leads to good relations

between the municipality and its investors (State and households) given them a license to

operate (Weber, 2008) Hence, investors will be more willing to invest on waste management

processes and municipalities will be able to increase the access to capital which means

improving relations with investors without capital provision (Weber, 2008) and improved

reputation on shareholders (Schaltegger & Burrit, 2005).

Heal (2005) and McGuire et al (1988), supported the fact that increase in employees’

motivation and productivity are advantages of CSR and these were seen in all of the

municipalities, where the interviewees said, the employees were very positive about the new

process, and hence motivated to work to make sure the process is successful. CSR activities

have impact on the cost of handling the waste in a positive way. Before the arrival of the new

process of handling the waste, waste had to be collected and transported for long distances to

disposal in landfill. Using this method there was a lot of cost involved in the long

transportation, occupation of lands etc. With the new method, most of these costs are now

avoided even though it costs more in the short term, however, it will be cheaper in the long

run, which clearly matches with the benefit of cost reduction by the implementation of CSR

(Schaltegger & Burrit, 2005).

46

Schaltegger and Burrit (2005), mentioned improved reputation and brand value as another

advantages of CSR. A good CSR standing will generate a good reputation for the

organization. Consequently, improved reputation enhances the performance of the

organization (Carrol and Buchholtz, 2003). According to empirical information, all the

municipalities in Sweden contribute to have a better environment and hence these four

municipalities have clean environment as their vision. Most of their activities concern

achieving this vision and being more involved in CSR activities. Therefore, in accordance to

Carrol and Buchholtz (2003), this will help them to gain a good CSR standing and eventually

improved reputation.

7. Conclusion

This chapter of the paper gives answers to purpose and research questions of the study in the

discussion part. It also provides suggestions for researchers and managers who are interested

in this topic. The chapter ends with limitations of the study and suggestions for future

research.

7.1 Discussion of the Results

In relation of the purpose of the paper which was to investigate the impacts of process

innovation on municipalities’ performances, this paper concludes that applying process

innovation has a positive impacts on financial, market and customer’s performance of the

municipalities. It has been investigated that, both administrative and technical innovations are

required to achieve higher performance for an organization. Concerning the financial

performance of the municipalities, it was found out that process innovation will result in cost

47

reductions and increasing profit in the long run. Additionally, application of process

innovation enables the municipalities to produce biogas, electricity, heating, fertilizers and

hence increasing their market share as well as market performance of the municipalities.

Concerning the customer performance, the municipalities deal with both businesses and

individual customers such as households. The business customers involve gas stations for

biogas, electricity companies, agricultural industries and heating companies. By the

production of these products in large scale in the future, it will lead to more profit for

municipalities to decrease the price of these products, hence making it more attractive to their

business partners. As for the individual customer, some of the municipalities sent out surveys

about the level of satisfaction of the customers and it was reported that, most of the customers

were positive regarding the new process. By sorting the waste it made them feel as if they

were part of the process of improving the environment. This will make the individual

customers more loyal to municipalities.

Regarding the first research question it could be concluded that success factors of process

innovation in waste collection processes are as follows:

The process of implementing new waste collection method should include incremental

improvements and be viewed as a continuous process.

Organization and human resources play a crucial role to ensure that the process is

successfully implemented. Managers’ role to allocate sufficient resources to the

project and level of employees’ motivation to carry out the process are important

factors which make the process successful.

Creating a vision within the municipalities for the waste collection process and view

the process as a strategy to achieve the desired objectives of the organizations.

Furthermore, in order to answer the second research question which was about the advantages

of CSR for municipalities, this study concludes that CSR have a positive impact on the

performances of the municipalities. The CSR benefits that were investigated which is access

to capital and license to operate had a positive impact on the municipalities’ performances. It

was also discovered that these benefits are not immediate; they are mostly long term benefits.

Other CSR benefits for municipalities also included the cost reduction in the long run,

positive influence on shareholders which is an immediate benefit, improved reputation and

brand value and the motivation of the employees who feel satisfied to know that their work is

contributing to a better and cleaner environment.

48

7.2. Theoretical and Managerial Implications

For the theoretical implications, this study did test the concept of process innovation in a new

context which is the waste management department in Sweden and it was proved to be

effective. Applying process innovation will lead to a higher performance of the

municipalities’ waste management department. Moreover, CSR was shown to have a positive

impact on the municipalities’ waste management departments. This shows that by the

application of CSR in the organization, it can actually get more access to capital and have a

good license to operate. The findings of this study showed that the theory of process

innovation is applicable in different business areas.

According to findings of this study, there are numbers of managerial suggestions. These

recommendations may be useful for managers of municipalities in other countries and also for

managers in organizations with similar characteristics. Innovation is adequately related to

attitude of organization’s management. Without a corporate strategy to achieve the desired

goals, innovation will be unguided and misdirected. Managers are advised to be aware of

importance of information in order to recognizing needs and fulfilling needs with innovative

ideas and processes. The role of managers for supervision of the whole process and

motivating their employees should not be neglected. Providing a work environment of

openness built on trust where every member of the organization feels free to express their

opinions without fear, is crucial for managers to be successful in implementation of

innovation. Additionally, establishing strong relationships with both individual customers and

business partners to create a positive image for the company could assist managers.

7.3. Limitations

The limitations of this study stem partly from chosen research approach which was qualitative

approach and partly from the research strategy which was multiple case study. Concerning

this, one of the main limitations of qualitative research involves the capability to generalize

the result to other cases because qualitative research mostly involves providing in-depth and

detailed information regarding a specific population or case. Qualitative research is often

tailored to the needs of one population or a specific case under study (Bryman & Bell, 2007).

Therefore, it would be complicated to extrapolate the findings and draw general conclusion

from the findings of qualitative studies (Ibid). Since this study focused on four Swedish

municipalities with a qualitative approach and these municipalities were not chosen in a

49

random fashion, therefore, the study lacks statistical generalizability, although analytical

generalization can be carried out.

One of the limitations with this study was that, after the interviews, it was discovered that

most of the Swedish municipalities work almost in the same way, implying that most of the

processes were very similar, so it was difficult to get different perspectives of the process

innovation in the municipalities.

Additionally, data collection method of this study may affect the result of this study. Since

semi-structured interviews were conducted to collect the data, therefore, the study had to rely

on respondents’ descriptions of their companies’ work, which could have been overstated or

understated concerning applying innovation in waste management processes. Moreover, one

interview was conducted for each case due to the limited time, thus the numbers of interviews

in totally was low. If more interviews could be done with different people in the same

municipality, more perspectives of answers could be contributed to the finding which makes

the sight broader.

Another limitation of this study was the ambiguity of concept of process innovation for

interviewees which may influence their answers. In order to avoid it, interview questions were

sent to the respondents in advance so it enables them to go through the questions and inform

us if something is not clear. This also may have affected the results of interviews since the

respondents were not able to answer the questions as natural as they did.

One of the limitations which this study faced is finding similar characteristics between

organizations and municipalities. In this direction it can be said that, municipalities are

organizations that provide public services. Similar to other organizations, they control their

own performances and have a boundary which separates it from its environment. Their

managers share goals and visions with employees at every level of the organization.

Organizations recognize good opportunities to grow and adapt to technological or operational

changes as municipalities carry out those. Municipalities also possess organizational structure

consisting of top managers, junior managers and employees. These similar characteristics

provided sufficient motives for this study to focus on applying process innovation on

municipalities’ performances.

50

7.4. Suggestions for Future Research

This study was conducted qualitatively and only four out of the 290 municipalities were

studied. For further research it will be useful to carry out a quantitative research on this topic

with a larger scale of samples in order to gather more information about different perspectives

in different municipalities with the ability to generalize the result. Moreover, the new process

of waste collection has been applied successfully in different countries, so it will also be

advantageous to get the different aspects of process innovation in waste management

processes from different countries. Furthermore, a research on the adoption and application of

this new process of waste collection in countries that have not yet adopted it, it will be very

beneficial for those societies.

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9. Appendix

9.1 Appendix 1: Interview Guide

General Information Name of the organization: Name and position of respondent: Years of employment:

Interview Questions:

Process Innovation

1. Why did you decide to employ the new techniques in order to handle the waste?

2. Where did the idea come from?

3. How did you design the implementation plan for the new method to deal with waste?

4. What were the conditions that were needed for the new system to be implemented?

5. Did you have any resistance from both employees and customers regarding the new

method? If yes, how did you handle it?

6. How did you implement the new process in your organization?

7. What kinds of factors do you think is important to ensure the process innovation is

successfully implemented in your organization?

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CSR

8. How do you make sure you collect all the waste on the streets?

9. What makes your municipality different from other municipalities in Sweden in relation to

developing waste management activities?

10. Is there any difference in the cost of handling the waste before using the new system and

after it? If yes, could you provide us with some numbers?

11. Do you have any program to motivate your employees to generate creative ideas, if yes,

are they reinforced?

12. Do your employees do some extra work apart from what is required from them?

13. Do you have any relation with the state (for instance, can they help you if the need

comes?)?

14. Do you try to establish relations with key customers or potential customers?

15. Are you interested in getting more waste from other customers so as to produce more by

products?

Organization’s Performance

16. Does the municipality have any production system that can produce useful material from

the collected waste? If yes, what do you produce and how much is the production volume per

year?

17. Does the application of the new waste management system help municipality to attract

more business partners? If yes, who are these partners and what is their interest?

18. What was the net profit of your department before applying the new system (waste

collection, biogas production, etc) and after its application?

19. What was the total cost reduction of your department before and after the application of

new system?

20. How is public's perception towards waste management nowadays?

21. Does municipality have any measurement to understand the customers` view and level of

satisfaction regarding its waste management activities? If yes, how does it work?

22. Are customer’s complaints decreased due to the application of the new waste management

system?

23. Does municipality provide customer service in dealing with waste management issues?

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